Washington state issues retail pot licenses

SEATTLE (Reuters) - Washington state took the final step in legalizing recreational marijuana use on Monday when officials began issuing retail licenses to stores that could start selling cannabis 24 hours later.

State regulators have accepted 334 marijuana retail applications. Only about 20 stores are expected to open on Tuesday. The Washington State Liquor Control Board has said many applicants failed final inspections, and some municipalities also have banned retail pot sales.

The state issued 25 licenses on Monday, and more stores are expected to open as state inspectors sign off on applications. The state earlier said it licensed 24 stores but later added an additional location in Bellevue, near Seattle.

Washington is the second state after Colorado to allow retail sales of recreational marijuana to adults under a heavily regulated and taxed system that voters approved in November 2012.

Possession of marijuana is illegal under federal law, but the U.S. Justice Department has said it will not intervene in states with "strong and effective regulatory and enforcement systems."

Once a retailer receives a marijuana license, the business is cleared to place an order with a licensed processor that must quarantine the product for 24 hours before delivering it to stores. Retailers must scan the barcoded inventory and enter the data into a statewide computer-tracking system.

Under the law, customers will be allowed to buy up to 1 ounce (28 grams) of marijuana. They also can buy up to 16 ounces (0.454 kg) of marijuana-infused product in solid form or up to 72 ounces (two kg) of marijuana-infused product in liquid form.

However, some retailers said they could decide to limit the first wave of buzz-seekers to a purchase of a matter of grams as they grapple with expected pot shortages.

And popular "edibles," such as those pot-infused brownies, are not expected to be available early on as no processor has been cleared to operate a cannabis kitchen as the state weighs rule changes over concerns of safety and access to children.

OPENING-DAY SALE

Among the businesses licensed on Monday were premises such as Bud Hut, Cannabis City and Margie's Pot Shop.

Tom Beckley, owner of Top Shelf Cannabis in Bellingham, said he received his license by email hours before dawn, and then placed his first marijuana order just a minute later.

The pot will not reach his store until early Tuesday morning because of the mandatory 24-hour delay enforced by state rules.

The shop plans to open at 8 a.m., and Beckley said he would be offering the first 50 to 100 customers through the door special promotional pricing of $10 per gram.

After that, customers can expect to pay $12 to $25 per gram, depending on the quality and strain. Beckley also said, depending on demand, he might limit buzz-seekers to a smaller amount of pot to extend supplies.

Regulators, business owners and analysts say marijuana stocks could sell out within hours or days after the shops open on Tuesday.

The shortage is largely because of limited harvests by licensed growers and processors or because they failed to clear regulatory hurdles to get their product to market.

Washington is grappling with a backlog of hundreds of would-be growers who must be screened by the state Liquor Control Board, the agency has said.

Washington state's licensing effort is part of a U.S. trend to loosen pot laws.

In the District of Columbia, backers of legal marijuana in the U.S. capital submitted more than double the signatures needed to put the issue on the November ballot.